What Does Comprehensive Coverage on Auto Insurance Mean?

Written by S. Arteta and Fact Checked by The Law Dictionary Staff  

Comprehensive Auto Insurance is an innovation introduced by insurers to their product due to the demand of expansion of the coverage of auto insurance which, before the change, was only limited to vehicle collision. Comprehensive Auto Insurance now covers all type of incidents that may cause damage to an insured vehicle which include, but are not limited to, theft, fire, vandalism, weather, falling objects and animal damage.

Not all causes of damages are covered by a Comprehensive Auto Insurance. There are also certain exclusions that would apply which include damage to the normal wear and tear, vehicle defects and other collision damages which are not included in the comprehensive coverage definition.

Comprehensive Auto Insurance is not compulsory. The least requirement prescribed by law for car owners and vehicle lessees is that they purchase a vehicle collision insurance which protects the vehicle only from collision incidents. However, due to increasing demand, insurance companies offered to the public the Comprehensive Auto Insurance to protect the investment of  vehicle owners from all other incidents which may cause damage to their vehicles. In fact, even if said insurance is not required by the law, lessors of vehicles and other vehicle owners purchased said insurance to protect their interests.

A Comprehensive Auto Insurance costs $250 to $1000 depending on the coverage and the deductible amount. This means that a higher deduction will protect the driver from damages before the insurance coverage kicks in, but the same will also have the effect of lowering the premium of the insurance. To illustrate, a deduction of $200 to $500 will lower the insurance premium by 15 to 30 percent.

Just like all other insurance, a Comprehensive Auto Insurance  have possible deductibles that the insured has to pay before the claim is paid. However, in most cases, it is not wise to file a claim under the Comprehensive Insurance System when the damage incurred by the vehicle is less than the cost of paying the deductible.

A Comprehensive Insurance is not required in most states. But, it is highly recommended for car owners who live in areas at risk for auto theft and areas prone to natural disasters such as hurricanes and tornadoes to purchase a comprehensive insurance plan to protect their investments on their vehicles. The compensation to be given by the insurer to the insured shall depend upon the extent of the damage and the cost thereof. The claim shall also be paid if the cause of the damage was one of the instances mentioned above.

 

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